FHA And Housing Deficits in Nigeria

FHA And Housing Deficits in Nigeria

349
SHARE
Federal Housing Authority Nigeria
Federal Housing Authority Nigeria

The plan by the Senate committee on Housing to ensure that the Federal Housing Authority (FHA) benefit from N30bn Real Estate Development Intervention Fund is being seen has a timely one, considering the huge housing deficit that is being experienced in Nigeria.
Speaking on the issue recently, the Chairman, Senate Committee on Housing, Senator Barnabas Gemade lamented on how inconsistencies of government policies have greatly hampered the efficiency and fortunes of FHA, adding that non-inclusion of the organization in budgetary allocations further made the 43-year old parastatal a creak under the strains.
Gemade, with his team, while paying a visit to the organization’s headquarters in Abuja as part of his constitutional oversight functions, promised to partner relevant housing stakeholders in order to reform and commercialize FHA so that it would have the capacity of delivering its mandate, most especially at this moment that housing deficit in Nigeria has hit 17 million units.
The Managing Director of FHA, Mr. Mohammed El-Amin agreed with the senate Committee that the organization is largely incapacitated due to unstable bureaucratic policies; therefore there is urgent need of legislative action that would hasten its commercialization process and the amendment of the act establishing it.
FHA was established by Decree 40 1973 now cited as Act F=14 Laws of the Federation of Nigeria 2004. With the intention of boosting its performance and service delivery, the organization was partially commercialized in 1988. Since its creation, its impact has not been fully felt due to inadequate funding and poor policy implementation.
According to the report of Nigeria’s Bureau of Statistics, there has been improvement in the growth of real estate sector to Nigeria’s GDP as it increased on an average of 17.5% between 2010 to 2013. However, this is just a drop in the ocean considering the high level of housing deficit that is still being experienced in Nigeria. With the considerable rate, it is self- evident that FHA needs to be urgently commercialized, restructured and re-organized; as this will make it contribute to the housing needs of Nigerians which is on the increase.
In a Research Paper title “Challenges to Providing Affordable Housing in Nigeria” written By Akeju Ajibola Andrew, says:
“We should start thinking of re-organizing the Nigerian FHA into a government sponsored mortgage insurance institution that will provide this service. My personal opinion is that the Nigerian FHA should not be saddled with the responsibility of building houses because this can be done by the private sector if the enabling environment is created. Such insurance gives mortgage lenders some level of comfort and will encourage them to extend the loans for longer periods to low-to middle income families. To also provide liquidity, such insured mortgages may be securitized, that is, pooled by the FMBN and sold in the domestic capital market to interested investors.”
The scholar also lists some factors that need to be looked into if Nigeria wants to provide affordable housing system, the factors are: Legislation (the Land Use Act of 1978 needs to be amended), delay in property registration (one day should be enough for property registration), good mechanism for risk sharing, absence of national credit database, lack of stable macroeconomic environment, lack of capacity or knowledge gap, rigorous procedures in approval of licenses, lack of primary infrastructural facilities, high cost of building materials, enforcement of contracts and tax burden.

NO COMMENTS

LEAVE A REPLY